The Users of credit cards receive the credit card statement, which is akin to a monthly utility bill. Many of us have the tendency to pay only the amount due, without even caring to give the bill a proper reading. This habit, however, sometimes can prove to be costly as frauds or incorrect payment information mi-ght be overlooked by us.

Do you tend to procrastinate or ignore reading the bill because you do not understand it or because terminology is confusing? Read on to understand your credit card statement better.

Credit card number
This is a unique 16-digit number assigned to you and super-imposed on your card. You need to mention this number in order to pay your credit card bills through cheque or for any other correspondence with the credit card issuer. Keep this number handy, so that you can report to the credit card issuer in case of any theft or fraud. This number will always be stated on your credit cards statement.

Credit Limit
This is the maximum amount that the credit card issuer allows you to borrow. This limit is based on your income profile and your payment track record. A good payment track record will help in getting your credit limit enhanced and vice versa. If you exceed the credit limit, the credit card issuer will charge an overdrawn fee. This fee is a fixed percentage of the overdrawn amount subject to a minimum and maximum amount.

Available credit limit
This is the difference between your credit limit and the amount you have spent (total amount due). If you have spent Rs 20,000 and your credit limit is Rs 1,00,000, then your available credit limit is Rs 80,000.

Payment Due date
Don’t mistake payment due date for the last day for writing a cheque for payment. This is the date by which the credit card issuer need to realise the amount that you have paid. So paying your credit card bill before the payment due date is key for managing your credit card history and credit score.

Statement date
This is the date on which the statement has been generated. It is used to calculate the interest amount, if you do not pay the full outstanding amount by the payment due date, even though the due date may fall weeks after the statement date.

Cash advance or limit
This prescribes the cash that you can withdraw from an ATM. This is called cash advance or cash limit and would usually be capped at 30 per cent of your credit limit. A cash advance will have a one-time transaction fee, which could be in the range of 2.5 per cent to three per cent of the cash withdrawn. In addition to this, interest will be charged immediately. The interest rate charged on cash withdrawals is more than that charged on your purchases. So this facility is best used only when you need funds on an emergency basis.

Total amount due
This is the total amount that owe to the credit card company. This amount is a cumulative amount, comprising of interest or any other charges such as over drawn fee among other things.

Minimum amount due
The credit card issuer fixes a minimum amount that you need to pay every month, which is typically a certain percentage of the total amount due. It is typically five per cent to 20 per cent of the total amount due. Non-payment of the minimum amount is treated as default and a late payment fee will be levied. If you opt to pay the minimum amount due, the unpaid amount is carried forward to the next billing cycle, under revolving credit facility. You need to note that any fresh purchases will not enjoy interest free period. You have to start paying interest from the day on which the purchase has been made. This will continue till the total amount due has been paid for. Even if you pay the minimum amount due, interest will be charged on the total amount due which will include the minimum amount due.
Suppose you have paid 60 per cent of the total amount due before the due date, interest will be charged on 100 per cent of the total amount due rather than on the balance 40 per cent. Thus opt for paying minimum amo-unt due only if you’re running short of money to pay off the total amount due.

Transaction details
Your credit card transactions show purchases, cash advances and payments made. Also any charges levied by the credit card company such as interest, annual fee, late payment charges am-ong other things will also be listed here. You need to go through these details to spot any discrepancy.

Reward points
This is the record of the points accumulated till date. The summary will give details on the opening balance, points redee-med and balance points. You can redeem the accumulated points on a need basis. AS each issuer has a different method of redemption the next time you receive your credit card bill, take your time to read it carefully. It will protect you from fraud and help you manage your cash flow better.